Clay Maitland, Managing Partner, International Registries, Inc.
Lawyer, businessman, philanthropist, mentor, Maitland is a man for all seasons and a global ambassador for the maritime industry.
(Article originally published in Jan/Feb 2018 edition.)
Tell us about your early life.
Since grade school my family and I lived near salt water, and in retrospect I was destined for a career that was more or less maritime. Like a lot of kids, I was fascinated by those plastic Revell ship models that could be assembled from out of a box.
My mother was American and my father, who was lost three months after I was born, had been a bomber pilot in the Royal Air Force. I should specify it was the British Royal Air Force. He was in bomber command and trained at the air base in Albany, Georgia. That made him an officer pilot in two air forces – the U.S. Army Air Force, as it was then called, and the RAF. This was important because, as a sole surviving son, I was exempt from military service when the Vietnam War came around.
What attracted you to the maritime business?
I went to college at Columbia University and then Law School at New York Law in Lower Manhattan. My stepfather, who had a lot of contacts in banking and the legal profession, suggested that I apply for a job at Burlingham Underwood and Lord. I did and, to my surprise, received an invitation to come down and interview with them.
As it turned out, I only got a few job offers and chose the one from Burlingham because it was an admiralty law firm. I had never studied admiralty law, and I admitted it to the partner who interviewed me. He replied, “That’s okay. You’ll learn at the expense of your clients.” That’s how I learned about on-the-job training.
How did you find your way to International Registries?
While I was at Burlingham I began working for one of their clients, which was then called Liberian Services. It was founded by Edward Stettinius, who had been Secretary of State under Presidents Roosevelt and Truman. The Liberian Registry was, by the 1970s, the largest ship registry in the world.
In 1976 I went to work for Liberian Services, which eventually became International Registries, Inc. We reached agreement with the Marshall Islands, a nation in the Pacific that was about to become independent from the U.S., to administer its maritime program. Today we have more than 26 offices around the world and are the second or third largest ship registry by tonnage, depending on how you measure it. We have been on the U.S. Coast Guard’s Qualship 21 list for 13 consecutive years. Qualship 21 (“Quality Shipping for the 21st Century”) was initiated in 2001 and recognizes those registries whose vessels meet the highest U.S. and international standards. Only about ten percent of vessels calling in the U.S. qualify.
Are you the sole owner?
No, there are three partners – Tony Guida, Bill Gallagher and myself. Bill is President, and all three of us are Managing Partners. Thanks to an outstanding staff, we have grown from a registry with about 10 ships in 1990 to 4,282 vessels with gross tonnage of 156,962,675 at the end of 2017. This rate of growth is a tribute to our employees and their marketing skills and also to the fact that a reputation for high quality is always in demand. The average age of vessels in the Marshall Islands flag, mostly tankers, bulkers and container ships, is about eight years.
What are the advantages of an open registry?
The biggest advantage, from the point of view of the industry, is efficiency of service. Because we have offices all over the world and certainly in every major seaport, ships can be registered, documentation issued, inspections performed and mortgages recorded in those offices. This is a huge economy of scale in that administrative costs are much lower than they are for the U.S. flag and other registries. If I have a dream, it is that the U.S. government will, someday, copy our model.
A lot of U.S. companies use open registry flags for other reasons as well. Labor costs are lower than for the U.S. flag even though mariners are comparatively well paid on foreign-flag ships. Nevertheless, the wage scale for Filipino seafarers, for example, is far less than it is for most U.S.-flag crew.
A more subtle advantage is that most open registry countries have efficient parliamentary regimes, permitting the amendment of their laws to allow for the recording of mortgages and other instruments in accordance with modern banking requirements. The comparable provisions of Title 46 of the U.S. Code, which covers the U.S. flag, are antiquated and unwieldy. Banks, law firms, owners and charterers prefer to deal with a registry that is efficient and up-to-date. Again, these problems with the U.S. flag, as well as others, could be easily fixed, and I hope that some day they will.
What needs to be done to make the U.S. flag more competitive?
A good start would be to bring back the defunct House Merchant Marine & Fisheries Committee. We want the U.S. government to support legislation that is modern enough to be usable by lenders in this country and elsewhere. That means updating what is called the Federal Preferred Ship Mortgage Act, which is Title 46 of U.S. Code 31301. Ship mortgage reform has been in the wind for years. We had a few small amendments in 1989 but nothing since. There is, unfortunately, a lack of focus in Washington. We need to modernize the way ships are financed just as we’ve modernized the way ships are built.
Why is there so little support for the maritime industry in the U.S.?
I think the answer is that people don’t think of how important ships are to our survival as a free nation. You know the old saying, “Out of sight, out of mind.” The lack of support for the U.S. Merchant Marine is really deplorably low, and the thing that worries a lot of old-timers is, when you think back to World War II and how we built all those ships, that we are going to need a lot more hulls today to move troops and materiel across the Pacific or the Atlantic. Where is this tonnage going to come from? Well, it’s not going to come from American yards, clearly. We can bring in or charter in tonnage from China, but I wouldn’t bet on that being available to us. We’re presently down to just north of 65 or 70 oceangoing ships in the U.S. flag.
By the same token, there’s a real shortage of young officer trainees coming out of our maritime academies. We need new facilities and we need to increase the budgets of the academies. There are certain congressmen who really do support the U.S. merchant marine but don’t get much traction. For instance, Congressmen Garamendi and Hunter offered a bill to reserve a certain percentage of petroleum and LNG cargo for U.S.-flag ships, called the Energizing American Maritime Act. How much Republican support does it have?
That’s why you have a guy like me, who works for an open registry, advocating for the U.S. flag. As an American, and for reasons of national security, we’ve got to get behind programs that will grow the U.S. flag. Without cargo, you can’t strengthen the U.S. flag, and if you don’t strengthen the U.S. flag, there’s another old saying, “You’ll never miss the water until the well runs dry.”
You are a noted philanthropist and sit on the boards of many charitable and civic organizations. Tell us about that.
I am very active on the Coast Guard Foundation and sit on its Executive Committee. We support the men and women who really need our financial and material help in many ways that are not covered by the Coast Guard budget. We had an extraordinary hurricane season last year, as we all know, and the Coast Guard played a vital part in response.
Here again the government, meaning Congress, is not doing enough to support the men and women of the Coast Guard in terms of adequately funding their work and their families. The U.S. Coast Guard is always taken for granted and told that it must do more with less. It’s like stretching a rubber band, and that rubber band is eventually going to break.
What is your main message to the industry?
My main message is that we all should do what we can to give back and support the U.S. maritime industry. In the last year my colleagues and I have funded the Virginia Maitland Sachs Scholarship at Massachusetts Maritime Academy. Several years ago, a similar scholarship in my name was funded at the State University of New York Maritime College at Fort Schuyler. If you support the maritime academies financially with scholarship aid and support seafarers in their daily lives, it can make a huge difference and fulfill a real public need.
My late mother, Virginia Maitland Sachs, was a passionate champion of the poor and particularly of disadvantaged children in New York City. When she passed in 2004, we decided to honor her memory by establishing Virginia’s House of Hope, which works with the New York City public schools and over the years has assisted thousands of needy children with food, clothing and other necessities. We also provide college scholarships and have a tugboat apprentice program.
What do you like to do in your spare time?
I’m an amateur birdwatcher and occasionally paint in oils. But mostly, as some of my friends say, I like to stir up trouble – like my involvement with the Merchant Marine Policy Coalition, which I chair. Its mission is to support the U.S.-flag fleet and the maritime academies and to advocate unity and the funding of programs to train our future mariners. My hero is the late but immortal Helen Delich Bentley. Helen, although she did not mince words, was a great unifier and champion of our industry. We must walk in her footsteps! – MarEx
Jack O’Connell is the magazine’s Senior Editor.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.